The 1988 Indian Gaming Regulatory Act Gave Native Americans the Right to Run Casinos On Tribal Lands

The first casino on an Indian Reservation was opened in 1980 in California. The Cabazon Band of Mission Indians opened the Desert Oasis Casino poker parlor. Within days, police raided the casino and shut it down. This led to a series of lawsuits and began the process to legalize gambling on Indian Reservations.

The passage of the Indian Gaming Regulatory Act came in 1988. Until then, gambling was legal only in Nevada and New Jersey. But with this Act, Indian Reservations are allowed to own and operate their own casinos.

Who Regulates Casinos on Indian Reservations?

The Indian Gaming Regulatory Act was initiated by Congress and is regulated by the federal government. For the most part, states do not have jurisdiction over the reservation casinos; however, there have been a few instances where the state has successfully blocked a reservation casino from opening. If the state does not allow gaming it can prevent a tribe from opening a casino. The tribe does have some leeway, however. There are different classes of casinos, and if there is any type of legalized gaming in the state, the tribe can use that to its advantage. For certain types of casinos, there is what is called a Tribal-State Compact, where the two entities work together, along with the Secretary of the Interior, to develop the casino agreement.

Reservation casinos must be operated solely on reservation land. It cannot simply be owned by the tribe and operated elsewhere. There is an exception in that a tribe can live in one state but operate a casino in another state, but again, the casino must be on land owned by the tribe and must follow the strict directives of the Indian Gaming Regulatory Act.

Where Does the Money Go?

Reservation casinos do pay taxes, like any other business, so some of the money goes straight to the government. After that, the revenue from the casino funds tribal operations, promotes tribal economic development, provides for the general welfare of the tribe, goes toward charitable donations, and supports the surrounding community. This distribution is a requirement of the Indian Gaming Regulatory Act. If this distribution is met, the tribe can request permission to pass along revenue to individual tribal members from the Secretary of the Interior.